Frank Holmes: Central Banks are the New Cartel, Here's What it Means for Gold

TL;DR

The Fed's emergency response to the coronavirus, along with negative real interest rates and peak gold supply, are all factors that could drive the price of gold higher.

Transcript

hi I'm Georgia Williams with the investi news network and we're here at the PDAC convention in Toronto joining me today is Frank Holmes CEO of u.s. global investor good afternoon Frank it's great to be here it's very nice to see you today we had an emergency response from the Fed to the corona virus and they cut interest rates can you talk to us a ... Read More

Key Insights

• 🇨🇫 The central banking cartel, consisting of the G7 and G20 countries, is using synchronized taxation and regulation, along with monetary policy, to stimulate economic activity.
• 🥺 Negative real interest rates, driven by the coronavirus and the contraction in China's manufacturing industry, could lead to an increase in the price of gold.
• 🏅 Peak gold supply and the interest in gold from central banks may drive up the price of gold, potentially leading to mergers and acquisitions in the gold mining industry.
• 🥈 The silver market has higher volatility compared to gold, but investors can still find opportunities by investing in silver stocks.
• 👋 Seeking exposure to gold through assets like Gran Colombia Gold notes, London Gold and Kirkland Lake Gold stocks, or the GOAU ETF can be a good strategy for investors.

Questions & Answers

Q: How does the Fed's emergency response to the coronavirus impact the markets?

The Fed's response is part of a larger trend of centralized monetary policy to stimulate economic activity. This, along with the significant contraction in China's manufacturing industry, could lead to negative real interest rates, which is positive for gold.

Q: Will the coronavirus impact mergers and acquisitions this year?

No, the bigger issue for gold mining is peak supply, which has already occurred. The interest in gold from central banks, along with the need for companies to make acquisitions to sustain their profile, could drive M&A activity.

Q: How can investors get into silver and feel secure?

Silver has higher volatility than gold, but it can still be a good investment. To weather the storm, investors can consider buying silver stocks, such as those in the silver mining industry, which may see a 15% increase if gold prices rise by 10%.

Q: What should investors do to prepare for the future?

Investors can consider buying gold-related assets, such as Gran Colombia Gold notes, which pay a good yield. They can also invest in London Gold and Kirkland Lake Gold stocks. For a more diversified approach, the GOAU ETF is a suitable option.

Summary & Key Takeaways

• The central banking cartel, led by the G7 countries, is using synchronized taxation and regulation, along with monetary policy, to stimulate economic activity.

• The coronavirus and the significant contraction in China's manufacturing industry could lead to negative real interest rates, which is bullish for gold.

• Peak gold supply and the interest in gold from central banks could drive up the price of gold, causing companies to make acquisitions to sustain their profile.